Domestic Energy Production: Vital for Economic and NationalSecurity

About the Author

Long before the terrorist attacks on September 11,
President Bush recognized the vital role that energy plays in the
economy and national security. Shortly after taking office, he
established the National Energy Policy Development Group under Vice
President Richard Cheney, tasking it with examining America's
energy needs and developing a balanced, comprehensive energy policy
to assure reliable, affordable, efficient, and environmentally
sound energy in the future.

Much
has been done since then. On May 17, the Vice President presented
President Bush with the group's responsible plan to reach these
goals. On August 2, the U.S. House of Representatives passed the
Securing America's Future Energy Act (SAFE) of 2001 (H.R. 4), a
comprehensive energy bill that incorporates many of the plan's
proposals.

Yet,
despite such timely steps to help lessen U.S. dependence on foreign
oil and promote energy development and production, progress has
stalled. The Senate, which began hearings on energy legislation
last March, has failed to act. The need for a comprehensive energy
plan is becoming more urgent because of the weak economy and
threats to security. As the President explained to his Cabinet,
"The less dependent we are on foreign sources of crude oil, the
more secure we are at home."

Dependence on
Foreign Oil
Concerns about America's dependence on foreign oil and the effects
that disruptions in supply would have on the economy grew
significantly after September 11. Currently, the nation imports
about 53 percent of its oil supply; one-fourth of that comes from
the Middle East. The Department of Energy's Energy Information
Administration estimates that by 2030, this dependence on foreign
oil could grow to more than 65 percent.

The
United States has resources that, if tapped, could make it less
vulnerable to oil or natural gas disruptions. The most recent
assessment (1995) by the U.S. Geological Survey (USGS) estimates
that America has a technically recoverable oil resource base
onshore of about 112 billion barrels--five times its proven
reserves, onshore and offshore, of 21 billion barrels. Gas
resources include as much as 1,074 trillion cubic feet in the lower
48 states and an additional 261 trillion cubic feet in Alaska--more
than a 33-year potential supply. Moreover, according to an
assessment by the Minerals Management Service in 2000, 75 billion
barrels of oil and 362 trillion cubic feet of natural gas underlie
U.S. coastal areas.

Studies by the USGS and the National
Petroleum Council (NPC) find prospects for major new discoveries,
particularly natural gas, most promising on public land in the
Rocky Mountain sedimentary basins, offshore in the Gulf of Mexico
(particularly the Eastern Gulf), and on the Atlantic and Pacific
Outer Continental Shelves (OCS). Nevertheless, federal law
prohibits exploration in the Eastern Gulf of Mexico and on outer
continental shelves. Likewise, it restricts or prohibits access to
much of the potential resources in the Rocky Mountain basins. A
1999 NPC study estimates that the gas resource potential of all of
these areas equals about a nine-year supply at current rates of
consumption. As Dr. Naresh Kumar, Vice Chairman of the Committee on
Resource Evaluation of the American Association of Petroleum
Geologists, noted in testimony before the House Energy and Mineral
Resources Subcommittee last March, "It is likely that with further
exploration, these resource figures would increase
significantly."

Technologies such as horizontal drilling
and three-dimensional seismic technology have advanced to allow
greater precision in drilling and extraction of a higher percentage
of oil and gas from each field. Combining these with management
techniques that promote environmental protection should leave no
scientifically sound reason for Congress to ban increased access to
these promising areas for natural gas and oil exploration.

Alaska's 1002
Area
The 19 million-acre Arctic National Wildlife Refuge (ANWR) in
northeast Alaska includes 8.5 million acres of permanent
wilderness, 9 million acres of wildlife refuge, and 1.5 million
acres set aside by Congress (the 1002 Area) for potential oil and
gas exploration and development. The USGS estimates that the 1002
Area could yield up to 16 billion barrels of oil--roughly equal to
what the U.S. imports just from Saudi Arabia over 30 years. The
President's plan calls for drilling in a tiny 2,000-acre sliver of
this area in the refuge's upper northeast quadrant--leaving a full
99.99 percent of ANWR untouched by exploration.

Despite claims otherwise, the 1002 Area is
not pristine habitat; it is a flat, treeless plain that reaches
-110 degrees with the wind chill in the winter. Reporter Jonah
Goldberg noted in National Review in August that his recent visit
there confirms a 14-year-old description in The Washington Post:
"[T]hat part of [ANWR] is one of the bleakest, most remote places
on this continent, and there is hardly any other where drilling
would have less impact on the surrounding life."

Congress approved exploration of the 1002
Area in 1995, but President Clinton vetoed that legislation. If he
had signed it, the United States would be well on its way to
reducing its dependence on foreign oil. The House has acted to
correct this policy blunder by authorizing oil and gas exploration
in the 1002 Area. The Senate should follow its lead and pass
comprehensive energy legislation that includes drilling in this
tiny section of ANWR.

Economic Effects
of Increasing Domestic Supplies President Bush believes that energy legislation is an
essential component of an economic stimulus package and "an
integral piece" of homeland security that would provide jobs for
Americans. A recent analysis of his energy plan, prepared in part
by the leading economics consulting firm of DRI/WEFA Inc., found
that it would result in greater energy efficiency, lower prices,
and less dependence on foreign sources, thereby improving the
nation's economic performance. Moreover, implementing the plan
would promote faster economic growth, create over 1.5 million job
opportunities, increase investment, and boost disposable income.
Such benefits were important before September 11. Now they are
crucial.

Conclusion
Energy fuels the economy. Understanding this, President Bush
proposed a balanced long-term plan that includes a diverse mix of
fuel sources, efficiency measures, and domestic production to
ensure reliable, sufficient, and affordable supplies in the future.
Each day Congress delays in passing a comprehensive energy bill
that the President would sign increases the nation's dependency on
foreign oil and undermines national security.

Charli E. Coon, J.D., is Senior Policy
Analyst for Energy and the Environment in the Thomas A. Roe
Institute for Economic Policy Studies at The Heritage
Foundation.